Milwaukee Public Schools submits draft corrective action plan to DPI

An empty high school classroom. (Dan Forer | Getty Images)

Milwaukee Public Schools submitted a draft corrective action plan (CAP) to the Department of Public Instruction on Tuesday to address the district’s overdue financial reports, which led to the departure of the district superintendent and put $16 million in state aid to the district on hold.

The draft plan identifies vacancies, lack of staff knowledge and an incompatible financial system among issues the district will address. The Milwaukee School Board said in a statement that the plan is designed to “facilitate the timely release” of state payments, including the withheld June special education aid payment, and correct issues responsible for the delayed submission of audited financial reports.

MPS Board President Marva Herndon said in a statement that the school district is “committed to resolving the issues surrounding the delayed financial data submission.”

“In addition to submitting the Corrective Action Plan to DPI, we are actively analyzing the root causes behind this situation, and we pledge to keep our families, staff and the public informed as we progress,” Herndon said.

DPI communications officer Chris Bucher said the agency is currently working through the draft plan, with conversations ongoing between DPI staff and MPS.

“We are hoping to reach an agreed-upon CAP by the end of this week,” Bucher said in a statement.

A team that includes DPI, external auditor Baker Tilly, senior director of the DPI Office of Accountability and Efficiency Matt Chason, internal audit manager Paul Geib and consultant Todd Gray will be responsible for ensuring that the district’s overdue financial data is completed and submitted. The team will also help MPS rebuild and restructure the district’s finance department operations, according to the plan.

The report indicates that MPS Chief Financial Officer Martha Kreitzman will likely be replaced.

Vacancies and inexperienced staffing are one of the major issues identified in the report.

More than half of the positions typically involved in developing and supporting financial reporting functions at MPS are vacant or staffed by temporary staffing, and the plan proposes filling at least 12 vacant finance positions by Sept. 26.

“MPS Finance staff have relied almost exclusively on the institutional knowledge and experience of financial reporting staff who have completed this work for, in some instances, decades,” the plan states. “Over the years, these staff have turned over and this knowledge and experience has left with them.”

In addition to staffing, the plan states that the district needs to update its financial system, BusinessPlus, to ensure that it will convert financial data to the DPI’s Wisedata system.

Both challenges were cited for three of the district’s overdue documents, including its fiscal year 2023 auditor aid certification and auditor fund balance, which was due on Sept. 15, 2023; the district’s 2023 annual report, which was due on Sept. 22, 2023; and its 2023 district audited financial report, which was due on Dec. 15, 2023.

“The current Finance Team tasked with completing this has limited experience, and it is unclear if all steps to perform the required tasks are documented in detailed standard operating procedures,” the report states. The district’s BusinessPlus system doesn’t connect with DPI’s data system, it adds.

The plan identified another challenge for a fourth set of financial documents — the district’s fiscal year 2024 certified budget data, which was due on Dec. 15, 2023.

“The current finance team is reliant on one individual with historical knowledge to perform the task,” the report states. That person hasn’t worked with the DPI system, however, and “there may not be documented steps to identify all the tasks needed” to move the data over from the district to DPI.

The plan proposes new deadlines to submit the missing financial documents, with the first due on July 24, 2024, and the final set due on Sept. 26, 2024.

The plan also calls for the establishment of a five-member MPS audit committee, which would support internal audit operations and advise the MPS Board on external and internal audit matters, and hiring a chief audit executive — a position eliminated from the district’s budget in 2010.

The proposed plan follows Gov. Tony Evers’ announcement Monday that he will move forward with two audits. One is of the district’s operations, processes and procedures. The other would focus on instructional policies and methodologies, including classroom learning environments, professional development policies and practices to support educators. Those audits will be in addition to ongoing financial audits of the district.

The MPS board is scheduled to vote on its 2024-25 budget on Thursday at 5:30 p.m., and will take comments from the public.

“As part of our ongoing commitment to transparency and accountability, we look forward to hearing from our valued stakeholders,” MPS Board Vice President Jilly Gokalgandhi said in a statement. “We trust the engagement will be polite, respectful and related to the matter at hand.”

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